Bond markets pricing in a possible recessionary scenarioSpread between US 2 year yield and Fed Funds Rate is one of the key indidcators to watch out for the state of the economy. Fed Funds Rate is an overnight rate. Historically, before any recessionary scenarios the spread was seen moving to negative territory, during Middle East Crisis in 1989/1990, dotcom crisis in 2000/2001 and Credit crisis in 2008.
Currently, the spread is at -1.67%, second lowest in history only to 2008 Credit crisis which was at -1.76%. This leads to a strong conclusion that the interest rate markets are possibly pricing in a recessionary scenario.
Interesting times ahead...
US02Y trade ideas
US02Y / US10Y Yield CurveThe Yield Curve has been inverted for a long time, and as rates are about to go lower, it can finally un-invert. When the 2-year yield is higher than the 10-year yield, the chart is above 1.0 ; But once the 2-year yield dips below 10-year yield, the chart should drop below the 1.0 mark.
Yield ChartThis chart tracks U.S. Treasury yields for 2-year (blue), 10-year (white), and 30-year (orange) bonds, along with the yield spread (green) between the 10-year and 2-year bonds. A positive spread suggests a normal yield curve and economic growth, while a negative spread (inversion) often signals a potential recession.
2 Year yields are weakeningWhich often signals a incoming recession.
The market leads the #FED who always raise and lower rates too late.
We have #Unemployment starting to tick up
Tight financial conditions, delinquencies on the rise.
So make hay over the next few months in memestocks, coins, bitcoin, alts, NVDA and so on.
But don't be left holding the hot potato when the music stops playings.
#Macro
#Meltup
#NVDA
#Nasdaq
#Stocks
#Bitcoin
#Altcoins
#Ethereum
#Pulsechain
$US02Y $US10Y $GLD $IVOL $TLT - The Chart tells the futureHere we have a historical chart showing what will likely be obvious in 2 quarters. The chart bats 100% on the issue but not on the resolution. As you can see with LTCM and the Bhat crisis in the late 90s. This chart is great for signaling when to risk-off, it does not signal risk on, for that I use the CBOE:BXY . The way I play the waiting game after going risk off is exposure to AMEX:IVOL NASDAQ:IEF AMEX:GLD NASDAQ:TLT AMEX:UUP
Cheers,
Can higher projected US02Y impact GOLD price ?TVC:US02Y has been trading to attractive levels fibonacci levels of 50% resulting in formation of bullish flag. Price is projected to go to 5.5% according to flag pattern. Recent NFP had higher than expected unemployment claims. Will this scenario attract investors to buy more bongs ?
What do you think will be impact of bullish bonds yield to the price of GOLD ?
*SMC* DXY correlated with US02Y Bonds As we can see on the daily tf, DXY has created Relative Equal High at 105.459 which translate to this level being a liquidity pool. We are likely to see 105.459 being taken out put where can it go? As we can see, above 105.459, the closer PDArray is the OrderBlock (made the 30 Apr) which confluate with the 75% of the Dealing Range and another buyside liquidity pool at 105.742. I dont expect DXY to trade above the mean threshold of the OrderBlock and if it touched I expect a strong reaction to the downside.
Concerning the 02 year Bonds , the body has respected the OrderBlock (30 Apr) creating relative equal low which has been taken out (june 12). There is a ''crack'' in correlation right now between the DXY and the major Bonds of the US which leads me to think that there is a higher probability for the DXY to follow the Bound and drop lower.
Fundamentally, Powell has been pointing out the progress that has been made (which could eventually lead to a cut of rates) However, the ''Dot Plot' ' surprised the market of a likely to only 1 cut this year instead of 2-3 rate cut priced-in, which could be the reason why DXY has been going higher the last couple of days.
Yields are still selling off after yesterday's dropLet's see how the TVC:VIX does over the next few days/weeks.
Still think it eventually breaks its major support level, at least temporarily.
The 2Yr and 10Yr are crashing and following yesterdays drop. TVC:TNX
#interestrates, as we said, will likely be cut, even if a little. They will most likely be raised again next year. Not political...
Anyway, since we have stated COUNTLESS times. They CANNOT lower rates but MUST lower them.
2Y yield - 45 degrees, break-outs and break-downs. Using 45 degree angles for 2Y yield (or inflation barometer) and stock market (faang). Pretty useful.
Bolts show where break downs of inflation are and where inflation is rising.
45 degrees show the strongest trend. You dont even need to use RSI. all must equal
Bond Yields about to crater?GOOD MORNING!
The 2Yr & 10Yr have broken the triangle pattern we posted on long ago.
The TVC:TNX (10Yr) has gone lower compared to the 2Yr in the same time frame.
Again, natural normalization is still out the window! What does this point to?
Will fed do what they are good at & mess it up again?
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Now look @ the 10Yr on a weekly chart!
AH HA! Are Bond #yields about to crater???
We have a Grey Rhino here - Markets are driven by ignoranceThe US long-term bonds have hit new lows, the yield curve has been inverted for two years now, and inflation remains uncertain, meaning interest rates may not ease at all. Yet, stock markets are reaching new highs.
We have a "grey rhino" in this market. A grey rhino is a large and visible animal that cannot be ignored. Try not to get too close to them because when they start charging, we can never outrun them.
In this market context, we face a big, obvious problem that investors completely ignore until it becomes a crisis. It's different from a "black swan," which is a rare and unpredictable event.
When we recognize that there are problems many do not understand, we have already won half the battle.
U.S. Treasury Bonds Futures & Options
Ticker: ZB
Minimum fluctuation:
1/32 of one point (0.03125) = $31.25
2-Year Yield Futures
Ticker: 2YY
Minimum fluctuation:
0.001 Index points (1/10th basis point per annum) = $1.00
Disclaimer:
• What presented here is not a recommendation, please consult your licensed broker.
• Our mission is to create lateral thinking skills for every investor and trader, knowing when to take a calculated risk with market uncertainty and a bolder risk when opportunity arises.
CME Real-time Market Data help identify trading set-ups in real-time and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
US two-year yields climbed four basis points to 4.87%.The latest minutes had more hawkish undertones than the market was expecting.
"Participants at the meeting assessed it would take longer than previously anticipated to gain greater confidence in inflation moving sustainably to 2%."
"Various participants mentioned willingness to tighten policy further should risks to outlook materialize and make such action appropriate."
Though it largely repeated rhetoric used by FOMC officials after the latest policy meeting, US stocks still weakened while the dollar and Government bond yields strengthened
It is unlikely to make a material difference to the long term outlook for US policy, as is reflected by little change in US interest rate futures.
The Hawkish undertones can be justified given the lack of the April CPI data before the minutes were recorded.
The stock market fell during regular trading hours as the most recent Federal Reserve minutes indicated that officials are not in a hurry to lower interest rates. After fighting for direction for most of the session, the S&P 500 fell sharply as several Fed officials expressed concern about the extent to which policy is constraining the economy - but the minutes also indicated policy "was regarded as restrictive. Treasuries were under pressure, with shorter maturities underperforming.
US two-year yields climbed four basis points to 4.87%. The dollar rose, weakening the appeal of commodities priced in the currency.